HB 2442 passed the Legislature to expand existing and create new local option fiscal tools for local governments.

The bill includes a variety of changes impacting local fiscal flexibility, increased timing for property tax levy lid lifts, and a new local option 0.01% sales tax for children and families.

The new local option sales tax may be adopted by the city council and does not require voter approval. The uses of the new sales tax for providing services that assist children and families include childcare, before and after school-based youth services, and shelter and rental assistance.

AWC is pleased that the final version of the bill also amended in parts of HB 2224 (yes, those similar bill numbers got confusing for us, too) that allows a city that establishes a voter-approved single-city fire protection district to keep its tax revenue authority instead of lowering its tax levy dollar-for-dollar, as it currently works.

Per part 10 of the bill, the single-city fire districts will be governed by newly established independently elected fire commissioners. While we had hoped and advocated that city elected officials could be retained as an option to govern these districts, we are pleased that this addition still frees up more fiscal tools for funding fire service.

We appreciate the work that cities, legislators, and partners have done to move this bill along in the process. It now sits on the Governor’s desk for signature.

Read this snapshot of what the final expansive bill does.

Local government fiscal flexibility bill awaiting fiscal committee action

February 27, 2026

The Senate Ways & Means Committee held a public hearing on HB 2442 last week. The bill includes a number of flexibility measures that help local governments, including cities.

Cities have asked that a provision to modify single-city fire districts’ taxing authority (originally included in HB 2224/SB 6037, which ran out of time at earlier cutoff points) get amended into the bill.

AWC continues to urge cities to support this legislation and ask senators to support adding flexibility provisions around funding for fire service. The bill must be voted out of the Ways & Means Committee by the March 2 fiscal committee cutoff.

AWC-supported modest fiscal flexibility bill passes the House, on to the Senate

February 20, 2026

HB 2442 is an omnibus package of ideas covering new and existing local option sales taxes, property taxes, and extended time frames for voter-approved levy lid lifts.

The bill passed the House floor last week in a milestone to keep it moving through the legislative process on the other side. As we feared in our article last week, the unfortunate bit of news is that the new 0.5% local option real estate excise tax (REET) for affordable housing was taken out on the floor before the vote. Also removed was a new county property tax levy to use on services for veterans, mental health, and developmental disabilities.

We support the bill as written because it still includes some good local option tax proposals and expansions. We are heavily engaged on this bill and encourage cities to reach out to their legislators in support.

You can also sign in as “pro” on the bill in committee before 12:30 pm on February 26 without having to testify. You can include written comments saying that cities support local flexibility to spend their revenues how they most need, as determined by the voters.

There were other minor amendments included in the bill. See the updated table below for a snapshot of how the lengthy bill reads now.

Dates to remember

HB 2442 is scheduled for a public hearing in the Senate Ways & Means Committee on Thursday, February 26, at 1:30 pm.

Modest fiscal flexibility bill needs floor votes to stay alive

February 16, 2026

AWC supports a bill that offers modest additional flexibility with existing local revenues. HB 2442 needs to be brought to a floor vote to keep moving through the process.

There has been vocal opposition to the REET provisions of the bill. If your city would benefit from expanded eligible REET uses for local housing-related projects (RCW 82.46.035) or expanded authority for 0.5% additional local option voter-approved REET for affordable housing (RCW 82.46.075), reach out to your representatives to let them know why.

Read the table in last week’s article to find out what else the bill does that could help your city. AWC supports the local flexibility to use local revenue tools in broader ways to serve our residents.

AWC supports bills offering modest additional flexibility with existing revenues

February 6, 2026

HB 2442 and SB 6294 offer new ideas for fiscal flexibility as a tool for local governments.

AWC testified in fiscal committee last week in support of the bills, highlighting the following reasons for our support.

While these bills are not cure-alls to address local government fiscal challenges, they do give cities some additional flexibility with existing revenues.

We also appreciate that the bills add an extended (10-year) time frame for voter-approved levy-lid lifts. This allows cities to seek approval from the voters, which is helpful to reduce elections costs down the road and provides more sustainable and long-term predictability in funding.

If your city likes these bills, reach out to your legislators and share the reasons why this legislation would benefit your city and its residents.

HB 2442 was amended to remove county public utility tax. The changes in the amended version are described below.

AWC-supported bills offer more local flexibility for several fiscal tools

February 2, 2026

HB 2442 and SB 6294 help cities access several legislatively restricted funds, providing them with flexibility to use existing resources.

This omnibus legislation is a package of ideas covering new and existing local option sales taxes, property taxes, and extended time frames for voter-approved levy lid lifts.

HB 2442 passed a milestone when it was voted out of committee last week with some amendments:

• REET for affordable housing: Requires that the local option real estate excise tax (REET) for affordable housing is imposed at a rate of 0.5% (instead of up to 0.5%) and removes the provision that the tax obligation is that of the purchaser as well as the seller
• County public utility tax: Removes these provisions
• Local sales tax for children and families: Provides that, if a city and a county both impose this tax, the county must provide a credit so as not to exceed a total rate of 0.01% (not to be confused with the more commonly seen sales tax rate of 0.1%)
• Veterans, mental health, and developmental disabilities property tax levies:
  • Provides that the veterans’ assistance levy may be imposed as a separate independent levy of a county rather than as part of the county's general levy
  • Removes a requirement that the veterans’ assistance levy be modified based on a county's regular property tax levy in the prior year
  • Adds the veterans’ assistance levy to the list of senior taxing districts
  • Provides that the yearly cap for the veterans' assistance, developmental disabilities, and mental health services levies in a county with a population of less than 10,000 is limited to 1%
• Flood control zone districts: Allows flood control zone districts to expend funds (or transfer funds to the county) to provide flood recovery assistance to households and businesses damaged by any flood subject to an emergency declaration by the Governor
• Public health clinic: Authorizes a county to impose a public health clinic property tax levy at a rate of up to 5 cents per $1,000 of assessed value for public health clinic expenses, allows the levy to be imposed separately from the county's general property tax levy and outside of the $5.90 aggregate limit on the taxing rate of local districts, and provides for prorationing of the levy if the constitutional 1% property tax limit is exceeded

We thank House Finance Chair Rep. April Berg for introducing and spearheading this legislation that aims to help cities. In committee, Chair Berg said this is a toolbox for local governments that provides tools they might need, or not, based on local need. She also said, “We know things are tough budget-wise, and there needs to be options and opportunities at every level of government.”

The Senate companion to the original bill is being heard in its committee this week. You can learn more about that bill in the article below.

Dates to remember

SB 6294 is scheduled for a public hearing in the Senate Ways & Means Committee on Thursday, February 5, at 1:30 pm.

House Finance Committee chair introduces a bill to bring cities and counties more fiscal flexibility

January 26, 2026

AWC has for years advocated for more local flexibility for cities to spend its revenues how it most needs.

In the legislative interim, we sent a letter to the chair of the House Finance Committee recognizing that in light of both state and local budget woes, one option to help cities is to loosen legislatively restricted funds so that cities have more flexibility to use the existing tools in their toolboxes.

With that legwork comes HB 2442. Sponsored by House Finance Committee Chair Rep. April Berg (D-Mill Creek), the bill offers legislative ideas toward local revenues impacting both cities and counties. We support this bill and appreciate the sponsor for introducing new ideas around fiscal tools for cities, which is one of AWC’s longstanding priorities.

The bill introduces a suite of ideas largely focused on new and existing local sales and property taxes, including extending timeframes for voter-approved levy lid lifts. It also expands existing local revenue uses to a broader range of services that support housing, children/families, utility assistance, and behavioral health.

It’s a lengthy bill with nine sections described briefly in the table below.

Dates to remember

HB 2442 is scheduled for a public hearing in the House Finance Committee on Tuesday, January 20, at 8 am.